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RIL reported largely in-line earnings (consol EBITDA of Rs425bn and PAT of Rs190bn deviated by 2-3%) in Q4FY24, combined with a 3% QoQ decline in net debt to Rs1.16trn. Retail EBITDA was an 8% miss on lower revenue, but was offset by better O2C on higher utilization and improved refining. Jio and Upstream were inline. Capex run-rate fell sharply to Rs232bn in Q4, though we believe ~Rs1.2trn p.a. would hold going ahead from new energy & petchem. We are positive on Jio tariff hikes, given the competitive landscape, while Oil & Gas and Retail should remain steady. We raise FY25-26E earnings by 2-5% each and SOTP based TP by 8% to Rs3,200/share on the back of higher profitability in Jio (due to ARPUs) and roll-over to Mar-26E. RIL is well-placed with steady earnings and positive FCFF; new energy should also commence. We retain ADD.

Key Result Highlights: O2C EBITDA recovered 19% QoQ to Rs167.8bn led by higher utilization on completion of maintenance activities combined with better gasoline spreads and lower SAED. Feedstock optimization and cheaper ethane also supported. O2C feedstock/sales stood at 19.8mt/17.2mmt, up 6%/4% QoQ, while EBITDA/mt rose 13% to USD102. Upstream EBITDA fell 3% QoQ to Rs56bn on slightly lower revenues, as KG Basin gas volumes were flat QoQ at 29.6mmscmd. Jio clocked strong net subs additions of 10.9mn (our est.: 10.5mn), while ARPU was a tad lower at Rs181.7, flat QoQ. Jio’s EBITDA was up 2.7% QoQ to Rs146.4bn. Network opex was up 2.1% QoQ to Rs78.7bn. Retail EBITDA fell 7% QoQ to Rs58.3bn. Net store additions stood at 62, while retail area rose 9% QoQ to 79.1mn sqft. Q4 revenue growth of 10% YoY was muted, likely due to lower transaction growth, while margins improved on better product mix and supply chain efficiencies. For FY24, consol EBITDA/APAT grew 14%/11%, while reported capex fell to Rs1.3trn YoY from Rs1.4trn. Dividend recommended is Rs10 (~10% payout).

Management KTAs: O2C business outlook stays healthy on firm middle distillate, strong gasoline cracks & healthy demand, though global volatility could sustain. Chemical margins are expected to recover steadily on slower capacity additions. Current KG Basin gas output is ~30mmscmd, along with ~23kbpd oil/condensate, while Company recently signed a term contract for 0.9mmscmd CBM gas. Jio has 108mn 5G users, while JioFiber is gaining traction in tier-2 cities. Company targets cohort-based scale up of Jio among SMBs. While Q4 was affected due to rationalization, outlook is steady, led by Digital, expansion in distribution & product portfolio. Capex is funded via internal accruals; the balance sheet is robust. Petchem and new energy would expand in capacity.

Valuation: We value RIL on SOTP basis, using Mar-26E EV/EBITDA method for core segments and EV-IC/EV-sales method for New Energy/Other segments. Key risks: Adverse commodity/currency, B2C competition, delay in monetization of ventures, policy & new business risks.

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